Question

A tool manufacturer has fixed costs of $68.00 a day and variable costs of $1.00 per screwdriver

produced. The company gets $2.50 per screwdriver sold. How many screwdrivers must be produced
daily to break even? Your answer should be a number only.

Answer 1

46

Explanation:

To breakeven, the total cost of the company which is the sum of the fixed and variable cost will be equal to the total sales of the company such that the profit/loss is zero.

Let x be the number of screwdriver that must be produced daily to break even

Then

68 + 1 * x = 2.5 * x

68 + x = 2.5x

collect like terms

68 = 2.5x - x

1.5x = 68

Divide both sides by 1.5

x = 68/1.5

= 45.33

This would be approximated to 46 screws